Saturday, October 31, 2015

Corporations are Killing Las Vegas.

I just got back from Las Vegas, I was going to a get together. While most people think of conventions like trade shows or ComicCon, in fact their are organizations that represent every conceivable organization and/or interest. There are also hundreds of reunions everyday in Las Vegas ranging from graduating classes to people who served at the same military base or suffered in the same disaster. Often people meet up in Vegas because it is a relatively inexpensive flight from anywhere in the country and it allows for private get togethers that will not even be noticed. In fact I watched two different semi-anonymous meetings where some sort of business was conducted.  Each involved one man sitting with a computer and meeting with three or four different individuals in a business center hallway, neither rented out any space, they could have just as easily had the meeting at a Starbucks (not a promotion for Starbucks, I actually prefer another coffee shop). The think about meeting in Vegas is that you always have an excuse for being there, gambling. The same type of meeting would be more noticeable at an indian casino, not enough people at one time. My meeting was much less secretive and much more public. This discussion is not about my meeting, it is about Vegas.

Las Vegas began as an old west town that had bar-casinos. Not unusual in the day as many places in the mid-west and west had bars where gambling was done on site. Think of the story of the shoot-out at the O.K corral. Wyatt Earp actually owned at least one such bar-casino. Doc himself was a professional gambler. For whatever reason, many states outlawed gambling and Nevada did not. During the depression Las Vegas took off with the building of the Hoover dam. It should be noted that the families of the men who worked on the damn often lived just outside of Las Vegas in Henderson where gambling was illegal as was prostitution. It should be noted that while prostitution is legal in parts of Nevada, it is NOT legal in Las Vegas.

In the late 40s a mafia gangster named Bugsy Siegel decided that the mob could make legal money on gambling in Las Vegas by attracting people from Los Angeles. It was already known that people in Los Angeles liked to gamble as they had supported a gambling ship off the coast for years until it stopped operating. After building the first real hotel casino in Las Vegas, Mr. Siegel was killed; but, the mob discovered the advantages for money laundering in having Vegas casinos and began building what we have come to know as modern Vegas. Vegas under the mafia was well run and thieves were not tolerated, instead, they were buried in the desert by the mafia. In order to keep their casinos the mafia insisted that the casinos run honest games and not allow cheating.

The mafia pretty much controlled Vegas until Howard Hughes went there and got annoyed that he could not use his favorite room in a hotel. Upon being told that, he decided to buy the casino and thereby changed the town. Not only did he begin buying casinos, he also got a television station for the town. After Hughes other companies decided to invest in casinos and basically took over from the mafia. The next big change came when Steve Wynn built the Mirage, the first truly massive mega-resort. After Wynn the resorts got bigger and grander with the MGM Grand taking it to an all new level. The mega resorts became a reason for Vegas becoming the home to more and more conventions and it was especially well suited to mega-conventions. During the 1990s Vegas began branding itself as a place for the family to vacation and the MGM actually added on a theme park with a rollercoaster and other attractions. That all ended after 9-11.

After 9-11 tourism dropped off and Vegas then doubled down on the sin city aspect with the phrase, "What happens here stays here". The MGM actually tore down their amusement park and Vegas stopped trying to attract families. Since 9-11 bankers and corporations have taken over Vegas and not for the better. Vegas began selling out it's individuality and began cross branding, the Palms had a Playboy casino, all the resorts began having celebrity chefs and services were dropped.

Slot machines in Vegas used to be coin operated and the floor of the casino was loaded with cocktail waitressed and change servers who would give you quarters in exchange for your dollars. The corporations determined that they could save a lot of money by switching to a ticket system and eliminating the change servers. Gone was the sound of coins hitting trays and the personal touch of people coming by to break your bills. In the last few years even the type of slot machines has changed. Now, the casinos are mostly "penny machines"; but, that term is misleading. These "penny machines" often require a bet of at least 40 cents and up to 80 cents as a minimum bet. These machines also had lower payouts. Old quarter and dollar machines used to have a 97% payout with the "penny machines" having payouts of around 93%. It may not sound like a big difference; but, it is in fact huge and worth billions to the casinos; but, it also caused fewer people to play the slots.

While many believe (and the corporations that own casinos in Vegas would like to believe) that the decrease in gambling revenue is down to the increase in Indian casinos, this is not true. In fact tourism to Vegas has been on the increase, it just has not led to an increase in the number of people playing slot machines. While the odds in Vegas used to be better than those at Indian casinos, the odds are now better at the Indian casinos. Consider the fact that Vegas now makes 60% of it's revenue from food and entertainment with the biggest entertainment draw being DJs and dance parties.

When you used to go to Vegas you might lose at the tables or machines; but, you could always get comped for a buffet or go buy the $1.99 steak and eggs or even a 99 cent shrimp cocktail. Those are both gone. I have also noticed fewer and fewer cocktail waitresses on the floors.

I haven't really stayed in Vegas for about 5 years. I travelled to Nevada but it was to another city to visit relatives. The biggest trends I notice in Vegas was the increase in branding on everything and at every casino. It has become one big commercial for everything from Harley Davidson to Gucci. I also noticed that the casinos which traditionally had their own restaurants have turned to contracting out with IHOP and Dennys and they do not offer $1.99 steak and eggs or 99 cent shrimp cocktails. In fact, food at the casinos has gotten ridiculous and entertainment costs have skyrocketed with shows like Celine Dion commanding $500 a seat. What the big corporations have managed to do is take away all the little perks that Vegas used to offer. As for the club scene in Vegas, expect to have to pay $500 for a bottle of champagne to get a decent table. I could do that in Los Angeles and see the same acts at concert venues without travelling 5 hours on the road.

Corporate perspective is killing Vegas as a place to go to gamble and the corporations are committed to eliminating true gambling with honest odds. The big move right now in Nevada is to change the way that slot machines work. Historically it has been illegal to make slots a game skill; but, that is just what they are promoting. Think of it this way. Imagine playing a slot machine, hitting all the right symbols for a payout and then having to throw darts at a board and hitting them all dead center to actually get paid. Sounds silly but that is exactly what they are trying to have a law passed to allow. While they could just increase the odds back to 97% to bring back gamblers, that is not going to happen because the corporate mindset is to increase profitability each year while decreasing expenses. That may work with selling clothes; but, it does not work for gamblers. Gambling is a choice, like picking a movie to see. Gamblers do not return to casinos where they constantly lose. If you hated the first "Fast and the Furious" movie, odds are that you did not watch the sequels. By increasing your chances of losing at the casinos, people will continue to stop going to them for gambling. The corporations will convince themselves that it is because people would rather go for the clubs; but, clubbing will lose it's draw and then there will be no reason to go to Vegas. Gambling is the essence of Vegas and it's attraction and once it loses that, it will go the way of Atlantic city and begin having to close more and more casinos. This will be devastating to Nevada as gambling is it's only big industry.

On a personal note, I used to go to Vegas once a month with my father and always enjoyed it. This trip has convinced me that I will not travel to Vegas to gamble. That is not a good sign for Vegas' future. Now, I do plan on playing in poker tournaments again; but, I can do that in California and get the food for less.

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